The 2023 investing year was another white-knuckle roller-coaster ride packed with twists and turns that kept us on the edge of our seats.
We started in a bad place coming off a 19.52% loss in the S&P 500 (as measured by the ticker VOO) and few people had any positive thoughts concerning the stock market. The discussion was not if, but when, the US would enter a recession. Later, continuing talk of war in Ukraine and concern about rising interest rates with a side of bank failures led us just to where we thought we would be on July 31st, a 19.74% increase in the market.
SURPRISING TURNS
Wait …what? You can’t tell me that with all the bad news in the world, the stock market increased in value during that time? Your skepticism is understandable and for those of you whose guns are loaded with a big round of “I told you so!,” you are right, we did experience a 10.03% decline in the market from August 1st through October 27th. That decline surrounded negotiations regarding the U.S. Debt Ceiling, the highest mortgage rates in 20 years and a possible war in Israel. Most people were pessimistic about the economy and the prospects of the stock market based on what we were hearing. There’s no wonder that we closed out the year with a 14.39% positive return over the last two months.
LESSONS LEARNED FOR FUTURE INVESTMENTS
Last year was a great lesson to teach us how we should approach our investment decisions. If we had based our decision to enter or stay in the market based on our perception of when it was safe, we would have stayed on the sidelines and missed a 24% return. Last year was not unusual—but normal—and showed us what we should expect from investing in the market.
WHAT’S IN STORE FOR 2024?
By now, we know it is a fool’s errand to try to predict what will happen with the market. With that being said, here are some things we think you can count on:
- You will experience some news that you won’t like and it will cast doubt on the stock market, economy, country or all of the above.
- There will be considerable discussion about the Presidential election and our ability to thrive as a country depending on who wins.
- The stock market will lose some degree of value which will make you question if it is a good idea to be invested still.
No matter the news, market performance or winning Presidential candidate, I will stay invested, just like I have in the past as I believe losses in my portfolio are temporary and gains are permanent.
Shaw Pritchett is a Financial Advisor and President of Jackson Thornton Asset Management in Montgomery. 334.240.3679 / [email protected]
